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City of Camden v. Formosa

October 23, 2007


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-7336-02.

Per curiam.


Argued September 25, 2007

Before Judges Skillman, Winkelstein and Yannotti.

These appeals arise out of a condemnation action filed by the City of Camden (City) on November 12, 2002, to acquire certain property owned by defendant, James John Formosa. Following a jury trial, final judgment was entered declaring that defendant was entitled to receive $235,000 as just compensation for his property.

Defendant appeals from: 1) an order dated March 29, 2004, which denied defendant's motion to bar the entry of a final judgment of condemnation and the appointment of commissioners; 2) an order barring the testimony of plaintiff's expert; 3) the denial at trial of defendant's motion to dismiss on the ground that the City failed to negotiate in good faith before commencing the condemnation action; and 4) an order dated October 10, 2006, denying defendant's motion for reimbursement of certain real property taxes. The City cross-appeals from an order entered on February 18, 2005, which denied the City's motion for reconsideration of an earlier order that denied its motion for possession of the property.


In December 2000, a group of the City's residents and other interested persons formed a "working group" to explore ways to address the economic decline of the Fairview Neighborhood section of the City. The "working group" invited the New Jersey Housing and Mortgage Finance Agency (NJHMFA) and the State's Department of Community Affairs (DCA) to participate. On December 26, 2000, a subsidiary of the NJHMFA issued a request for qualifications seeking for-profit developers with project experience in the City to survey properties in the downtown area and the Fairview Neighborhood to determine if they were suitable for multi-family and single family development. In January 2001, RPM Development Group (RPM) was selected and charged with preparing a feasible plan for redevelopment of the area.

On April 12, 2001, the City Council adopted Resolution MC-01:277 requesting the planning board to conduct a study to determine whether the Fairview Neighborhood should be designated as an area in need of development and, if so, prepare a redevelopment plan. On the same date, the City Council adopted Resolution MC-01:278, which designated the Council as the entity responsible for implementing the redevelopment plan. The resolution noted that RPM had offered to enter into a contract with the City to act as redeveloper. The resolution stated that upon adoption of the redevelopment plan, the City would enter into a contract with RPM for the "planning, re-planning, construction, or undertaking of any project and/or redevelopment work in the Proposed Redevelopment Area."

After the adoption of Resolutions MC-01:277 and MC-01:278, the planning board had a map prepared delineating the boundaries of the proposed redevelopment area. The planning board also obtained a report from Schoor DePalma, Inc., an engineering and design firm, indicating that an investigation had been undertaken and the Fairview Neighborhood was an area in need of redevelopment under N.J.S.A. 40A:12A-5.

On October 9, 2001, the planning board held a public hearing and adopted a resolution recommending that the City Council designate the Fairview Neighborhood as an area in need of redevelopment. On October 11, 2001, the Council enacted Ordinance MC-3704 and adopted the redevelopment plan for the Fairview Neighborhood, as recommended by the planning board. On December 6, 2002, the Council enacted Ordinance MC-3715, which approved the redevelopment plan for the Fairview Neighborhood.

Defendant's property is located at 1276 Collings Road in the Fairview Neighborhood of the City. The property is identified as Block 721, Lot 13, on the City's tax map. On January 3, 2002, Richard E. Polton (Polton), the City's appraiser, inspected defendant's property and thereafter issued an appraisal report valuing the property at $155,000 as of that date.

In his report, Polton noted that the property consisted of .46 acres of land area, with a one-story warehouse that was built around 1920 and was in "average condition." Polton used the income capitalization and sales comparison approaches to value the property. In his income capitalization calculation, Polton estimated the rent generated by the warehouse building based on leases of comparable industrial warehouse properties in the vinciity. Polton concluded that the "effective" gross rental income from the property was $27,775.

By letter dated June 3, 2002, the City's attorneys offered defendant $155,000 for the property based on Polton's appraisal. The letter stated that the City preferred to acquire the property by means of a "mutually acceptable agreement." Defendant obtained from Paul Salvo, Jr. a statement of the replacement cost of the warehouse located on the property. The price quotation is set forth in a document dated October 8, 2001. Salvo stated that the replacement cost for the warehouse was $496,500.

It appears that the parties did not engage in any negotiations, and the City filed its complaint on November 12, 2002. The judge entered an order of judgment dated February 24, 2004, declaring that the City had validly exercised its condemnation power, and appointed commissioners to determine just compensation. By order dated March 29, 2004, the judge denied defendant's motion to bar the entry of final judgment and the appointment of commissioners.*fn1

The City filed a declaration of taking on August 6, 2004 to obtain possession of the property. The parties agreed to the entry of a consent order dated August 11, 2004, which stated that upon deposit of $155,000 with the Clerk of the Superior Court, the City would be entitled to exclusive possession of the property.

The City deposited the monies and in September 2004, defendant moved to withdraw the funds. Defendant then claimed that there had been a misunderstanding concerning the terms of the agreement. By order dated October 21, 2004, the judge denied defendant's motion to withdraw the funds and vacated the consent order.

In November 2004, the City filed a motion seeking an order granting it immediate possession of the property. The motion was denied by order dated December 3, 2004. The City filed a motion for reconsideration, ...

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